Profit warnings wave to sweep High Street

The City was today bracing itself for the biggest wave of retail profit warnings in recent history, with stalwarts including Marks & Spencer being tipped to add to the sector's misery.

Safe as houses: House of Fraser could be part-owned by the Icelandic government

Grim predictions for the January reporting season, which kicks off next week, came today as it emerged that House of Fraser, Hamleys and a host of other well-known High Street stores could soon be part-owned by the Icelandic government.

Under plans being drawn up by ministers trying to revive the Nordic nation's collapsed financial system, the icelandic government is reportedly considering taking stakes in the stores owned by troubled retail investment group Baugur.

The retailers would be owned by the government and creditors to the icelandic banks if the plan - a debt-for-equity swap between its nationalised banks and Baugur - comes to fruition.

Baugur's interests also include supermarkets group iceland and upmarket fashion chain Karen Millen. Specialist tea and coffee seller Whittard, which was also part of Baugur's sprawling empire, was put into administration just before Christmas and immediately sold on to Epic Private Equity.

Meanwhile, Adams, which has joined the ever-growing list of High Street casualties, is expected to appoint PwC as its adminstrator later this week.

The childrenswear chain, which supplies Boots with clothes under the Mini Mode brand, collapsed for the second time in less than two years at the weekend.

News of the latest retail victim came as experts predicted a string of disastrous updates from the High Street in the coming days.

Debenhams, Dunelm and M&s all report next week and analysts warn that the stampede of shoppers heading to the sales in search of bargains came too late to save the stores from miserable trading updates.

'The first quarter of 2009 is going to be extremely difficult. Retailers have bills to pay after Christmas and there will be financial pressures, particularly over rent,' one retail analyst warned today. 'A profit warning is as likely as not,' he said of M&S.

Analysts have expressed concerns in particular for Focus DiY, Jessops, Clinton Cards and Land of Leather.